EUR/USD forecast: Going nowhere in a hurry ahead of the Fed decision

• A modest USD pullback helped gain some positive traction on Monday.
• The uptick lacked bullish conviction ahead of the key FOMC meeting.
• Tuesday’s US economic data might provide some short-term impetus.

The buying interest around the shared currency reemerged at the start of a new trading week and lifted the EUR/USD pair back above the 1.1100 handle, though bulls lacked any strong conviction. Renewed selling pressure around the US Dollar was seen as one of the key factors that helped the pair to stall its recent pullback from two-month highs and regain some positive traction on Monday. The incoming positive trade-related headlines remained supportive of a better market mood and dented the Greenback's perceived safe-haven status against its European counterpart.

Bulls remain reluctant ahead of FOMC

The US President Donald Trump indicated on Monday that they are “ahead of schedule” on finalizing phase one of the trade agreement with China. This comes on the back of last week's comments from the US Trade Representative (USTR) office, saying that they are close to reaching phase one deal and hope to sign a deal in mid-November. The USTR on Monday added to the recent optimism and said that it is studying whether to extend tariff suspensions on $34B of Chinese imports, which would expire on December 28 this year.
 
Meanwhile, fading safe-haven demand led to a sharp intraday upsurge in the US Treasury bond yields and helped limit deeper USD losses. This coupled with investors' reluctance to place any aggressive bets ahead of the highly anticipated FOMC meeting, starting this Tuesday, further collaborated towards capping any strong follow-through positive move for the major. Having failed to capitalize on the positive move, the pair witnessed a modest pullback during the Asian session on Tuesday. Moving ahead, traders will now take cues from the German Bundesbank President Weidmann's scheduled speech at 09:50 GMT and the US economic docket – highlighting the release of housing market data and the Conference Board's Consumer Confidence Index.

Short-term technical outlook

From a technical perspective, nothing seems to have changed much for the pair. Bulls are likely to wait for a sustained move beyond 23.6% Fibonacci level of the recent bounce from 2-1/2 year lows before positioning for any further near-term appreciating move. This is closely followed by 100-DMA barrier near the 1.1125-30 region, which if cleared decisively is likely to accelerate the positive move further towards the 1.1165-70 supply zone before the pair eventually aims towards reclaiming the 1.1200 round-figure mark.
 
On the flip side, the 1.1080 horizontal level might continue to protect the immediate downside ahead of the 1.1065-60 region (38.2% Fibo. level). Failure to defend the mentioned support might run the pair vulnerable to slide further towards the 1.1030-25 support area (50% Fibo. level) en-route the key 1.10 psychological mark.